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Firms Invest more in Shared Services than Traditional Outsourcing

In a study on outsourcing trends done by advisory firm KPMG, more than half (52%) of the companies based in Asia, Europe, and North America capitalized on shared services in the last three months. The demand for other segments such as IT outsourcing (ITO) and business process outsourcing (BPO) have grown only 37% and 27%, respectively.

The report also states that IT, finance and accounting, and HR functions are the most commonly outsourced processes by the banking and healthcare sectors.

Shared Services or Traditional Outsourcing?

Samus Rae, Partner at KPMG’s shared services and advisory team, said the weak projections for BPO growth are parallel to the reduced demand for traditional, generic, and transaction-oriented outsourcing deals particularly for finance and accounting compared to non-traditional BPO.

Moreover, 68% of IT vendors are confident about their pipelines and the potential growth in the next three months. Meanwhile, half of the vendors anticipate growth in the demand for bundled packages such as business and IT services.